PhillyInc: PNC Bank to end free checking

By Mike Armstrong, Inquirer Columnist

PNC Bank, the fourth-largest bank in the Philadelphia area by deposits, says that over the next year, it will phase out free checking accounts.

The Pittsburgh-based bank said Monday that over the next month, it would be alerting customers about the change through messages in their monthly statements as well as on its website.

But unless you've been snoozing since the 2008 financial crisis and the regulatory response embodied by the Dodd-Frank financial-reform law in 2010, the loss of free checking at another institution should come as no surprise.

Following the capping of fees banks can charge for debit-card transactions, many institutions have been looking for ways to make up the lost revenue by imposing or raising fees for other services and cutting operating costs.

A number of big banks have eliminated free checking. Wells Fargo halted it for new customers in 2010 and for existing customers in six states, including Pennsylvania and New Jersey, in 2012. It imposes a $7-per-month fee on accounts that dip below a $1,500 minimum daily balance or fail to receive more than $500 in direct deposits each month.

In September 2012, Bankrate.com said the availability of free checking had dropped to 39 percent of banks from 65 percent in 2010.

Now, PNC, which had $9.42 billion in deposits in the Philadelphia region as of June 30, 2012, is set to join the trend. But a bank spokesman said nine out of 10 PNC customers already maintain minimum balances of at least $500. So for many, the shift to its new standard checking account in June 2014 shouldn't incur a $7 monthly service charge.

That would put PNC's fee higher than the average monthly service fee of $5.48, according to a Bankrate.com survey.